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Another Word about QITs – Part 3

The past 2 weeks my blog posts have covered QITs.  Last week I told you about a case in which the trustee initially transferred the correct amount to the QIT, the Medicaid recipient’s entire monthly Social Security, however, when that amount increased because of the cost of living adjustment, the trustee did not make the adjustment to transfer the higher amount into the QIT bank account.  The caseworker approved the case but warned that if the mistake was not corrected it would result in a denial of Medicaid benefits when it came up for renewal in a year.

In another case in another county, the caseworker decided not to let the mistake go.  The trustee put the correct amount into the QIT for the first couple of months but then subtracted $50 from the Social Security amount received before transferring the rest into the QIT account.  As I explained last week, all income must go to the nursing home with limited exceptions.  So why did the trustee subtract $50?

That’s because under Medicaid rules recipients can keep enough of their income to cover any health insurance premiums such as a Medicare supplement, commonly referred to as a Medigap policy.  The recipient is also entitled to keep $50 each month for personal needs.

But, this is where we again get into the technicalities of the QIT.  You would think that all that should matter is that the nursing facility receive the correct amount of income each month.  Except that it very much does matter.  The trustee was supposed to place the entire Social Security payment into the trust bank account and then subtract back out the $50 and send the rest from the QIT account to the nursing facility.

The trustee explained the difficulty in conducting banking transactions during the current Covid pandemic.  She simply wanted to make sure the correct amount made its way to the nursing home in the simplest way possible.  Eliminating the transaction back of $50 from the QIT by subtracting it before depositing the rest seemed sensible.  Nevertheless, the application was denied when the caseworker reviewed each monthly statement and discovered the mistake.  

Unlike the case I told you about last week this caseworker was unwilling to overlook the mistake so we appealed.  At the hearing, when I told the judge that the State has in other cases pointed out mistakes that needed correction before issuing a denial, the county representative simply responded that, “it’s not our job to tell them how to set it up”.  He also said he had “no choice” but to deny the application because of the incorrect QIT funding.  The denial, if upheld, will cause the loss of 7 months of Medicaid benefits which at the private pay rate is approximately $90,000 in care costs.

At the time I am writing this we are waiting for the judge’s decision on our appeal.  The lesson to be learned, however, is clear.  The State has imposed very specific rules with regard to QITs and will enforce those rules in an effort to avoid paying benefits, no matter how insignificant and technical the rules violations may be.  We can’t stress enough to trustees that they must follow the QIT rules exactly and do not deviate from them in any way.  As I always tell our clients you can do everything else right with regard to Medicaid but if you fail to use a QIT or use it correctly your application will fail.